Richardson adds to stake in GMP

GMP Capital Inc.'s former CEO Kevin Sullivan, left, and income CEO and current president Harris Fricker.

Darren Calabrese/darren calabrese The Globe and Mail

BOYD ERMAN

March 26, 2017July 11, 2012

Winnipeg's billionaire Richardson family keeps ramping up its stake in GMP Capital Inc., one of Canada's biggest independent brokerages, snapping up stock as it falls to new lows.

Family controlled James Richardson & Sons, Ltd. purchased another 1.34-million shares of GMP in the past seven months, equivalent to almost 2 per cent of the company. That gives Richardson almost 20 per cent of the common stock of GMP, and almost 24 per cent when you add in warrants that Richardson owns that could be exercised into more common shares.

The purchases come at an interesting time, for all sorts of reasons.

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GMP shares are sagging to new lows below $5 amid doldrums in the brokerage business. They have lost almost half their value since February as a drought of business for all brokers has dragged on, and it appears that as the shares slid, Richardson has been buying.

Also, there are some in Winnipeg who say the Richardson family is cooling on its big investment in the brokerage business. It's hard to square that with added purchases of the stock that had to cost at least $6.5-million.

And finally, the share purchases loom large in view of the approach of 2014. That's when GMP must make Richardson an offer for Richardson's share of a network of retail financial advisers that GMP and Richardson co-own. The agreement calls for GMP to pay in stock. With almost a quarter of the company in its pocket already, Richardson is moving into a position to control an even bigger chunk of GMP.

All Richardson is saying is that the purchases are "for investment purposes only."

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